What does the GDP report really mean?

First-quarter GDP was revised up from -2.9% to 2.1%, suggesting a smaller hole at the start of the year from which the US economy emerged. On net, the economy grew 0.95% in the first six months of the year.

GDP with 6-month average

In the details, personal consumption rose 2.5% in the second quarter, more than double the 1.2% increase in Q1, while still a noticeable decline from a +3% pace at the end of 2013.

Goods purchases led the gains, up 6.2% in Q2, thanks to a 14% increase in durable goods and a 2.5% increase in nondurables. Service expenditures rose 0.7% in Q2.

Consumer spending contributed 1.69% to headline growth between April and June.

In the first quarter, the weighting between services and goods spending was reversed: consumer spending was centered on services, up 1.3% as opposed to goods, up 1.0%.